Question

Yorks outstanding stock consists of 80,000 shares of noncumulative 7.5% preferred stock with a $5 par value and also 190,000

Use the data in Exercise 11-10 to determine the amount of dividends paid each year to each of the two classes of stock assumi

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Answer #1
Part 1-Noncumulative preferred shares
Par value per Divdiend Dividend per Number of Preferred Dividend
Preferred share Rate Preferred share Preferred share for 1 year
Annual Preferred Dividend $5 7.50% $0.375                     80,000 $30,000
Total Cash Paid to Paid to Dividends in Arrears
Dividend Paid Preferred Common at year-end
Year 1 $18,000 $18,000 $0 $0
Year 2 $28,000 $28,000 $0 $0
Year 3 $3,00,000 $30,000 $2,70,000 $0
Year 4 $4,50,000 $30,000 $4,20,000 $0
Total $1,06,000 $6,90,000
Part 2-Cumulative preferred shares
Par value per Divdiend Dividend per Number of Preferred Dividend
Preferred share Rate Preferred share Preferred share for 1 year
Annual Preferred Dividend $5 7.50% $0.375                     80,000 $30,000
Total Cash Paid to Paid to Dividends in Arrears
Dividend Paid Preferred Common at year-end
Year 1 $18,000 $18,000 $0 $12,000
Year 2 $28,000 $28,000 $0 $14,000
Year 3 $3,00,000 $44,000 $2,56,000 $0
Year 4 $4,50,000 $30,000 $4,20,000 $0
Total $1,20,000 $6,76,000
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